Two-tiered Wage System a Danger to Filipino Families

Workers in Southern Tagalog, the most heavily industrialized region in the Philippines, demand a P125 (US$2.99 for one day’s work) increase in wages across the country in order for Filipino families to receive some form of temporary relief (photo from Bulalat, courtesy of PAMANTIK-KMU).

Instead of increasing the wages of Filipinos across the country President Aquino is instead freezing the wages and creating a two-tiered wage system which will actually decrease the wages that families will be taking in while the cost of living is continuing to sky rocket in the country.

[T]he Two-Tiered Wage System (2TWS) that is currently being implemented by the National Wages and Productivity Commission under orders from Malacanang was meant to make the wages of Filipinos the lowest in the world. The 2TWS will further shrink the minimum wage by 30% based on DOLE’s proposal,” [KMU Chair Elmer] Labog said.

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Aside from the 2TWS, the workers cited the other crimes of President Aquino and DOLE: Contractualization, Low wages, Occupational Health and Safety violations, No Union policy, Trade Union repression, and Unemployment and lay-offs.

“Filipinos, like all workers around the world, are currently trapped in precarious work due to the neoliberal policies that are imposed by monopoly capitalists and financial oligarchs, and facilitated locally by governments like Aquino’s, ” Labog added.

The two-tier wage system sets a “floor wage” cheaper than the current minimum wage. It whittled down the basis of fixing mandatory wages to just the poverty threshold. Prior to that, the poverty threshold itself was also whittled down.

Since last year, the Aquino government reduced the poverty threshold per Filipino per day from P52 to P46 ($1.24 to $1.10). They replaced the contents of the food bundle with the cheapest alternatives, so people who used to be “food poor” are now out of that category, even if their food intake has not improved.

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The basis of “floor wage” is more bare-boned, compared to the basis of the minimum wage, which factors in the cost of living. Minimum wages theoretically also factor in productivity and competitiveness, two things which KMU legal counsel Remigio Saladero had tagged as the bases often cited by employers to keep the minimum wages low. But in factoring them as bases for determining the mandatory minimum wages, Filipino workers are supposedly entitled not just to try to keep pace with the cost of living, but also, theoretically, to share in the profits.

In the two-tier wage system, this would no longer be the case.

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[P]roductivity–based second tier is meant to bleed workers dry with higher quotas, higher demands and more exploitative working conditions. Already, workers, especially in export-processing zones suffer from urinary tract infections because they could not go to the toilet when they need to as this would disrupt the production process.